As of May 1, the China will be getting rid of the business tax and implementing a value added tax.

CCTV’s Yang Zhao explains the new rules.

For many years, China has operated a dual system. VAT has been long imposed on tangible goods, but services are instead subject to business tax.

In 2012, China started a pilot program in Shanghai to extend the scope of VAT to include a variety of services.

The program has been gradually expanded from some cities to the entire nation, and eventually, business tax will be replaced by VAT across the board.

How China’s new VAT will impact small businesses

CCTV’s Ming Tian takes a look at how the new VAT will impact smaller businesses in the country. Tax experts have said that compared to other sectors included in the VAT scheme, consumer services has its own edge to gain from the tax change.

Ronald Wan on value-added tax in China
For more on the value-added tax in Chinac, CCTV America’s Michelle Makori spoke to Ronald Wan, chief executive of partners Capital International.
Follow Michelle Makori on Twitter @MichelleMakori